Tan Chong logs H1 loss of HK$75.3m as Covid-19 measures curb operations

CAR company Tan Chong International reported a loss of HK$75.3 million (S$13.3 million) for the first half of its financial year ended June 30, as Covid-19 measures curbed or halted its business activities, the firm said in a statement on Wednesday after the market close.

This was a sharp reversal from the HK$97.1 million profit attributable to shareholders in the first half of the previous financial year. The firm did not report separate results for its second quarter.

Revenue for the first half was HK$5.78 million, down 16 per cent from HK$6.91 million in the year-ago period.

The first-half loss translated to loss per share of HK$0.04, compared with earnings per share of HK$0.05 in the year-ago period.

An interim dividend of HK$0.01 per ordinary share was declared, payable on Sept 23. This is half the HK$0.02 dividend in the year-ago period.

In the 11 Asia-Pacific countries where Tan Chong operates, measures taken against the Covid-19 pandemic "curbed and, in some instances, caused almost total suspension of the group's business activities and operations", said the company.

It expects the second half of 2020 to be "equally challenging" in Singapore and Hong Kong, though gradual and intermittent recovery is expected in the city state.

While mainland China's automotive market shrank in the first half, the economy is showing signs of recovery, said Tan Chong. "The group believes that it is unwise not to be engaged in this large and prospective automotive market. Thus, we will continue to persevere for the long-term benefits that this market of great potential may offer."

The company said that it "is hesitant to determine the duration and severity" of the Covid-19 crisis, and thus cannot assess the full financial impact for the year, though it highlighted that a prolonged crisis "will have a material effect" on its year-end results.

Tan Chong shares closed flat at HK$2 on Wednesday before the release of the results.